The Calls Get Louder
Joining an increasing number of public voices, the Institute of Public Affairs released a report today calling on the governments of Australia to encourage and support the economic opportunities brought by new industries arising from the sharing economy.
‘The Sharing Economy – How Over-Regulation Could Destroy An Economic Revolution’ report highlights the benefits that innovative industries such as ridesharing bring to the Australian economy as technology brings new value to under-utilised assets.
“The sharing economy presents gains in resource sustainability due to increased access to idle and under-utilised resources. There is a growing focus on access over ownership as a way to exchange the value of resources. When the economy maximises units of usage, rather than the number of units sold, ‘we begin to see eco-efficiency and business efficiency align.’”
Like the Draft Harper Competition Review released in September, the IPA report also notes that the main impediment to these new industries creating an even greater impact is government regulation designed to protect incumbents from competition over the best interests of the public.
“With this continual disruption of existing powerful industries, there is a significant threat that regulations will be used to protect private, rather than the public, interest. On one hand, there may be calls for some light level of regulation in the genuine public interest. On the other, there are calls for government entry barriers from incumbent industries.”
Indeed, in understanding that the sharing economy has forced a debate on how governments regulate innovative industries, NSW Transport Minister Gladys Berejiklian in June promised a public consultation and said about ridesharing, “You don’t want to limit people’s choice because at the end of the day it does come down to choice.” We are sure the hundreds of thousands of uberX riders in Australia would agree and we eagerly await this promise of consultation.
As uberX flourishes in Sydney, Melbourne, Brisbane, Perth, Geelong and the Gold Coast, the support for sensible regulations that are based on the public interest and encouraging innovation is growing. We have heard calls for reform from a number of organisations and individuals including Choice, Graeme Samuel Chair of the Victorian Taxi Services Commission, Professor Allan Fels, NSW Shadow Transport Minister, Penny Sharpe, NSW Minister for Finance, Dominic Perrottet, Independent Lord Mayor of Perth, Lisa Scaffidi, the Western Australian Liberal party. The list goes on.
Innovative industries change the way things have been always been done and provide opportunities that couldn’t have been imagined only a few short years ago. While change can be hard, denying the benefits in favour of protecting the status quo not only limits the choices and opportunities now but stifles the possibilities of our future.
The IPA report: “By constraining a particular industry, technology, or business model today, we are also shutting down future potential industries, technologies or business models along that course. The problem with these costs is that they are implicit, and there is no counterfactual. Yet they are almost undeniably extremely large. Entrenching a specific industry structure onto an industry runs counter to future innovation.
This is evidently clear in the case of Uber. Due to a previously defined set of incumbents new entrants are forced to squeeze into the existing constraining regulations. If they cannot fit into this artificial structure, they are faced with a huge cost of regulatory legal battles. These battles are unnecessary and lead to an excess of wasted time and money.”
The voices calling for change are growing and excuses for inaction are dwindling. We call on the governments of Australia to join jurisdictions around the world in implementing regulations that put the public interest, safety, economic opportunity and innovation for our cities first.